Lord Lawson of Blaby once observed that occasional sterling crises were an
inescapable part of a Chancellor’s lot. “He soon learns, if not to enjoy
them, at least not to lose any sleep over them,” the former Tory Chancellor
said in his memoirs.

George Osborne cannot afford to be quite so sanguine. This year’s declines in
sterling have yet to develop into a rout, but they send a very clear signal:
investor faith in the Government’s fiscal and monetary framework is
deteriorating fast.

The pledges of budgetary probity that won the new Chancellor admiration from
big investment houses in 2010